[n4r9]

One of those arguments is:

> there's not that much motive to gain API market share with unsustainably cheap prices. Any gains would be temporary, since there's no long-term lock-in, and better models are released weekly

The goal may be not so much locking customers in, but outlasting other LLM providers whilst maintaining a good brand image. Once everyone starts seeing you as "the" LLM provider, costs can start going up. That's what Uber and Lyft have been trying to do (though obviously without success).

Also, the prices may become more sustainable if LLM providers find ways to inject ad revenue into their products.

[unilynx]

> Also, the prices may become more sustainable if LLM providers find ways to inject ad revenue into their products.

I'm sure they've already found ways to do that, injecting relevant ads is just a form of RAG.

But they won't risk it yet as long as they're still grabbing market share just like Google didn't run them at the start - and kept them unobtrusive until their search won.

[pr337h4m]

Uber and Lyft rely on network effects, which do not exist in any meaningful sense for LLM API providers.

[n4r9]

Yeah, that's definitely a factor in the attempt to "undercut and outlast". I guess I have two defenses: firstly, network effects might not be crucial, it might be enough for there to be a small cost to changing provider; secondly, I imagine the providers are finding ways to use network effects to bolster adoption - e.g. "Find me a party date when all my friends are free, book the catering and message them with invites".

[nitwit005]

Brand is huge in every market. It's hard to get people to visit your website at all. People know about OpenAI, and look it up.

[TZubiri]

No network effect + already profitable.

Not at all like Uber, let it go

[nitwit005]

Incoherent response.